Real Estate Question

[StevieD]

I am in the process of buy a house. The problem is I have to sell my house to make a very large down payment. My mortgage people, GMAC, recommended a 100% percent interest only mortgage to be re-negotiated when I sell my house.
I have written in the P and S that I will get my earnest money back if I do not obtain financing by 6/23. Well 6/23 has come and gone. I have a commitment letter by GMAC that says I get the loan As long as the new house appraises for $600000, the full purchase price.
I have heard from my broker that the appraisal has been done but is under review. They said they got an extension.
I am getting cold feet now. And I want to get out of the deal because the past couple of weeks the market in around here has dried up. In the town my house if for sale at there are currently 110 houses for sale. There were 62 when I put mine on the market a month ago.

My question is, can i get out of the deal and keep my earnest money because I actually did not have the loan on the 23rd?

To be honest I am concerned that the appraisal is taking so long.

 

[onetrickpony]

How much earnest money are we talking about?

Standard policy at my company is to do a desk review on all loans over 90% CLTV. Your loan iis 100% CLTV so most likely that is the reason for delay.

I doubt you could back out with the reason you used above. I would be amazed that GMAC did not provide you with some type of pre-qual that the seller will argue is an offer for financing.

 

[StevieD]

I have the pre-qualified notice. I also have a commitment letter stating that I have the loan as long as the house is appraised at or above the amount of the loan, on by June 23rd. We are talking about $30,000.

 

[taoist]

...there are attorneys on this board that are from your area.... I would ask Jack for their e-mail addys....

 

[loungelizard]

Did you sign the extension? if so how long is it? any other contingencies? just go through your contract, they are designed to protect you and the seller, so look for whatever outs you may have.
If you didn't sign the extension, then at least under Missouri Real Estate law your contract has expired and is no longer enforceable.
Good Luck,
ll

 

[Franky Wright]

Stevie,
When you put the offer to purchase on the house you are buying, did you have an "Subject to Sale" clause in your contract?
I have been a broker for 23 years, let me know............
Franky

 

[StevieD]

No Frank I did not. The only stipulation was that I had to secure financing by the 23rd. I do have a commitment letter from GMAC, but it says the house I am buying must be appraised for at least the amount of the loan. My question is that the 23rd has past and GMAC says the appraisal is under review. I was wondering what my rights are. Can I claim that I did not have financing by the 23rd because the appraisal is still under review. To be honest I am worried that the appraisal is under review. It sounds like someone might be working awful hard to prove the house is worth the value of the loan.

 

[The Man is Here]

if you are planning on living in this house for 10 years or more you dont want to go with an interest only mortgage. only do that if you plan on living there for a couple of years and then flip it. those interest only loans are not good to do in the long run.
you can also just refinance after 2 years and then go with a normal loan. will also give you a little money as well.

any way good luck with your house

 

[AR182]

stevie,

i would see a real estate attorney asap.....& even before that.

good luck.

 

[StevieD]

Thanks guys. The intrest only mortgage is only until I sell my present house. I know that those things are bad deals usually. I will call another attorney on Monday.
Thanks guys. I did not sign any extension.

 

[Franky Wright]

My mortgage people, GMAC, recommended a 100% percent interest only mortgage to be re-negotiated when I sell my house.
I have a commitment letter by GMAC that says I get the loan As long as the new house appraises for $600000, the full purchase price.
I have heard from my broker that the appraisal has been done but is under review. They said they got an extension.
To be honest I am concerned that the appraisal is taking so long.

Ok, I'm back.
First off, not sure why GMAC mortgage people recommended this 100% interest only loan vs. a bridge loan, but that is another story.
The fact that you have a loan commitment that is subject to appraisal, only tells half the story. The laws here in Wisconsin have changed recently to reflect these so called commitment letters. Now brokers are being directed to write their offers with more precise language/contingencies that address this exact issue. Regarding your situation however, two years ago here, you would be stuck with perfoming your end of the contract except for one thing..........(They said they got an extension.)
WHO IS THEY? No extensions are enforceable by contract unless they are agreed to by the parties they effect.....which would be you and the seller. NOT THE BROKER/LENDER, Iam assuming when you say "They", these are the people you are speaking of?
That is your out
Now Stevie, remember, that this opinion is subject to interpretation, which when fighting over 30K, usually means the courts :scared . But that is the best I can do for you without actually seeing the CONTRACT. And usually when I give advice on these situations, there is something in that contract that would make what I just told you "null and void" :cursin:
GL and curious to hear back

Franky

 

[StevieD]

Here is the latest. This stuff can only happen to me!

I talked to a real estate lawyer this morning. She said everything sounds ok to her. That they are probably just busy. Don't forget all these people would be working together at sometime anyway, which is why I don't trust them.

I called my agent. The guy that is supposed to be on my side. He said that their is no problems at all. The appasial is fine. The lender saw it and said it was good. But GMAC is backed up because they sold so many houses this month. He said he will stay on top of it and get back to me. He said he also heard from the sellers agent wondering what is holding it up.

The Lender called me tonight. She said the appraisal was done on the wrong form. The appraiser used a form 2055 when he should have used a 2044. And once he fills out the 2044 everything will be ok.

So that is where it stands now. I still have no info.

I want to tell you I tried selling real estate without an agent about a year ago and the lawyer screwed me. He never told me the buyer never signed the P and S or left earnest money.

So this time I decided to go weith all big name legit companies and I feel like still getting the run around!

 

[loungelizard]

Did you higher a "buyers agent" if not don't be fooled, your agent is working for the seller unless you signed a buyers agent agreement (at least in Missouri)

good luck,
ll

 

[Franky Wright]

Did you higher a "buyers agent" if not don't be fooled, your agent is working for the seller unless you signed a buyers agent agreement (at least in Missouri)
good luck,ll

That was exactly my next question after I asked if there was a "Subject to Sale" contingency drafted in the offer. :scared
LL, I doubt there is a Buyers Agent involved, if there is, then there are some real issues with him or her :cursin:
I only bring these other things up to help other Mad Jackers down the road. Now to Stevie's specific problem. He wants out of this deal................
Stevie, you need to consult an attorney who;
1. Does not know the realtors, realtors companies, Title Companies/Escrow Co, Lenders (GMAC), and any other vested players.
2. When you find that, tell him or her your objective, is to get out of the contract and get your earnest monies back.
3. Consult more than one attorney!

By the way, where are our esteemed counselors when you need them

For me to help you any further, you must get more specific, regarding the people involved and the contract itself.
GL
Franky

 

[loungelizard]

yep Franky don't think a buyers agent is involved, but Stevie said the agent was supposed to be working for him, a lot of misrepresentation gives us all a bad name.

Peace,
ll

 

[StevieD]

There is in fact a buyers agent involved. Here is the latest. They sent me a revised commitment letter which is now dated July 27 instead of July23. It says the loan has been approved subject to the conditions listed. One of the conditions is that they need one additional comp.
Considering it is now 6 days past the original date I am going to see another lawyer today to see if I can get out of this.
Thanks for all your help and I will keep you informed.

 

[dawgball]

I, personally, don't think that you're cold feet should be ground to stand on in getting out of a contract that you signed. If the lenders are not living up to the contract, then you should be able to get out of it.

But in your first post:

I am getting cold feet now. And I want to get out of the deal because the past couple of weeks the market in around here has dried up. In the town my house if for sale at there are currently 110 houses for sale. There were 62 when I put mine on the market a month ago.

You have to remember that there are real people on the other end of this deal who are probably rejoicing that they have sold their house. Now because you have cold feet, you are going to try and loophole your way out and leave them holding the rope.

I don't think this is a very honest approach.

 

[StevieD]

You are right Dawgball that the seller should not suffer. At the same time the lender and my agent should be upfront with me. The reason I have the cold feet is because they have not come up with the comps to justify the loan.
Anyway, according to my lawyer I do not have a leg to stand on. Wether I get the loan or not at this point means nothing. I had until July 23rd to tell the seller I could not obtain financing. After that drop dead I am obligated to purchase the house or lose my earnest money no matter what happens between the bank and me. The P and S is between the buyer and the seller. At least that is how it was explained to me.